Technical Sentiment: Bearish
Key Takeaways
- Payroll rise by most since 2012, NFP 288k vs 216K;
- U.S. Unemployment Rate drops to 6.3%;
- AUD/USD tries to break below 2014 bullish channel;
- 200-Day Moving Average eyed next.
AUD/USD has been grinding lower for three weeks now, testing several intermediary support levels until it reached the 200 Simple Moving Average on the 4H chart ahead of the U.S. NFP report. With a huge increase of 288K vs the expected 216k, and a drop in the Unemployment Rate to 6.3%, the US Dollar received an instant boost and will continue to gain against its Australian counterpart.
Technical Analysis
AUD/USD broke below the 200 Simple Moving Average on the 4H timeframe for the first time February 4th, when the bullish trend began. Consequently, the pair is officially bearish on this timeframe and will continue to target the major support levels.
A break and close below the support trendline of the bullish channel is required, as well as a close below 0.9200, in order to make way towards 0.9154. This support is a confluence between the 200-Day Moving Average and 38.2% Fibonacci Retracement from 0.8659 to 0.9460. If the pair closes below the 200-Day Moving Average, 0.9000 will be tested shortly afterwards.
With Stochastic in oversold territory, a small bounce off 0.9154 or 0.9136 is possible, yet the downtrend configuration should remain intact. Selling rallies remains the preferred strategy as the pair is expected to continue making lower highs and lower lows next week.
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Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets
